The market is still in a weak state Aluminum prices are weak

On the macro front, affected by the better-than-expected performance of US inflation data, the current market is still more aggressive in expectations of interest rate hikes, with a high probability of a 75BP rate hike this week, coupled with the weakness of non-US currencies, the US dollar index is expected to remain strong
.

Domestically, the smelters that stopped production in Sichuan began to resume production one after another, and it is expected to complete the resumption of production at the end of October and early November, with the implementation of Yunnan's power shortage and power rationing policy, the local electrolytic aluminum enterprises reduce production or between 10%-20%, but some aluminum plants feedback that the scale of production reduction will continue to expand, or up to 20-30%, need to pay attention to the subsequent production in Yunnan and other regions
.

In terms of spot, traders receive less goods, and the atmosphere of circulation between traders is not active, while the downstream is mainly based on just-needed procurement, and the transaction situation is relatively general
.

On the supply side, the overall impact of overseas production capacity is limited, affected by energy factors, European and American electrolytic aluminum enterprises have reduced production by 1.
3 million tons in the past 1 year, and there are still aluminum plants or further production reductions, but the pace of production reduction is slowing down, superimposed on the increase in production in South America, the overall impact margin is weakened
.
Domestically, the impact of power cuts in Sichuan has basically subsided, but it may still take about 2 months for production capacity to recover, while Yunnan according to the latest survey data, the scale of production reduction may be further expanded, and the affected production capacity may reach 1 million to 1.
5 million tons, and the time may last until next year's flood period, pay attention to its progress
.

In terms of downstream demand, it is still in a weak state, and the demand performance is average
.
In terms of inventories, both LME and domestic social inventories showed signs of bottoming, confirming poor demand
.

Overall, there is uncertainty about the negative drag on the supply side, but the expectation of overseas macro recession has risen again, coupled with the continued weakening of domestic demand, it is difficult to have a substantial repair in the short term, and it is expected that the space for aluminum prices to rebound is limited
.